Keogh Plan

-Salary Reduction

-For anyone who is self employeed,

but must be offered to workers

-Can invest up to 40k a year

or up to 30% of income

Annuities

-A contract with an insurance company

- Guarantee you a certain rate of return

after retirement

- Usually very small return

Individual Retiremtent Account

(General Definition)

A personal retirment plan anyone may

begin as long as they have earned income

Traditional IRA

Taxes deferred until withdrawal

Roth IRA

Taxed upon deposit, withdrawal without

being taxed

401 k

 -Salary reduction plan

-Self directed by you

- company offers it but you have to

decide where the money will go

Employee Stock-Ownership Plan

(ESOP)

Own stock in the company you work for

 The Rule of 72

-The formula that determines how long

an investment will take to double.

-Divide 72 by the interest you recieve to

get answer in years

-Stocks: 72/12% = 6 years

Profit-Sharing

 -A pension plan established by an

employer to share profits with

its employees

-Depends on company's profitabilty

Simplified Employee Pension

(SEP)

 -Salary Reduction

-Offered by small companies with

less than 100 employees

403 b

 -Salary reduction

-For those who work for non-profits,

educational institutes, or public workers

-Best of all retirement plans

Defined Benefit Pension

-Pensions

-Guarantess you a specific

amount of money when you retire

-Money based on salary and

length of service

Defined Contribution Plan

-Contributions are paid into an

individual account for each member

-Definite contributions but uncertain

returns until they are recieved

 Simple interest

 The annual rate of interest times

your principal

Compound interest

The annual rate of interest times

your principal and accumulated

interest

Tax Exempt

Investment instruments in which

you do not pay taxes on your gains